The Capital Gains Tax (Annual Exempt Amount) Order 2009

EXPLANATORY NOTE

(This note is not part of the Order)

This Order specifies £10,100 as the exempt amount for the tax year 2009-10 by virtue of section 3 of the Taxation of Chargeable Gains Act 1992 (c.12) (“TCGA 1992”), unless Parliament otherwise determines. Section 3(1) of TCGA 1992 provides that an individual is chargeable to capital gains tax for a year of assessment only on the amount by which his taxable amount for the year exceeds the exempt amount.

By virtue of the Capital Gains Tax (Annual Exempt Amount) Order 2008 (S.I. 2008/708) the exempt amount for the year 2008-09 was set at £9,600. The amount of £10,100 is the amount for 2008-9 increased by the amount of the percentage increase in the retail prices index for September 2008 over that for September 2007, and rounded up to the nearest £100 in accordance with section 3(3) of TCGA 1992 ( as amended by section 83 of the Finance Act 1993 (c.34)).

Under section 288(2) of TCGA 1992, “retail prices index” has the same meaning as in the Income Tax Acts; and “retail prices index” is defined in section 989 of the Income Tax Act 2007 (as amended by paragraph 16 of Schedule 3 to the Statistics and Registration Service Act 2007 (c.18)) as “(a) the general index of retail prices (for all items) published by the Statistics Board, or (b) if that index is not published for a relevant month, any substituted index or index figures published by the Board”. The retail prices index for September 2007 is 208.0 and for September 2008 is 218.4 (based on January 1987 as 100) (see Table 7.2A at page 155 of the January issue No.561 of Financial Statistics (a National Statistics publication). This publication can be found at http://www.statistics.gov.uk/downloads/theme_economy/FinStats_Jan09.pdf